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At the beginning of the year, Credit Karma partnered with Qualtrics on five surveys covering different aspects of Americans’ financial lives. From these surveys, a picture of people’s personal finances as they relate to the COVID-19 pandemic in the United States emerged.
Overall, the results depict many Americans struggling but determined to get their financial footing in the first half of 2021. While many people depended on outside help to get by, they’re also prioritizing saving — perhaps as an insurance policy for an uncertain future.
Here are some of our key findings.
Hurting for jobs39% of all respondents said they’d been unemployed at some point between February 2020 and May 2021 because of COVID–19 (May 2021 survey).
Food insecurity26% of people in our survey said they experienced food insecurity during the pandemic, with a little over half of them (53%) relying on food banks or government aid at some point to eat (February 2021 survey).
Getting by with some helpBesides government aid, 38% of all respondents said they received other help with their financial situations in 2020, including money gifted or loaned by family or friends (January 2021 survey).
Paying it forwardOf those who got help from family, friends or others in 2020, some 65% said they were now more willing to help others in the future (January 2021 survey).
Focusing on saving82% of respondents said that the pandemic demonstrated the importance of having emergency savings (February 2021 survey). In our March 2021 survey, 54% of respondents overall had an emergency account of some kind.
Gen Z and bankingThe youngest generation in our March 2021 survey showed signs of avoiding banking. Of those Gen Zers who received a stimulus check, only 60% received it by direct deposit, the lowest of all generations surveyed (January 2021 survey). Of the Gen Z respondents in our March 2021 survey who had an emergency fund, 24% said they were holding their emergency fund in cash, not in a bank account.
Read on for more — plus trends to watch.
January 2021 survey: Aid during the pandemic
Our survey in January found that 80% of all respondents had received a stimulus check in 2020. Over half (54%) of those who received checks said they used the money to pay for necessities, like rent, groceries and utility bills. This tracks with the 54% of people who agreed that the first stimulus check helped them make ends meet, and the 55% who said they needed another check to ensure financial stability.
Besides using the money for essentials, the next two most popular categories for use of stimulus checks — paying down debt and saving the money — were tied at 26%.
Only 12% said they used the money for nonessentials like clothing, electronics and exercise equipment.
Only 56% of Gen Z survey takers got an economic impact payment in 2020. Many in this youthful group may still count as dependents, which would prevent them from directly receiving a stimulus check. Interestingly, although Gen Z is stereotyped as being exceptionally tech savvy, they had the lowest use of direct deposit when receiving stimulus checks at only 60%. Compare that to the average rate of 76% direct deposit when looking at stimulus check recipients across all generations. Gen Z’s low adoption rate for direct deposit presents an interesting question for banks.
Besides government aid, 38% of Americans received other help with their financial situation in 2020. For those that got an outside boost, the most popular types of help included the following:
- 36%: Money gifted by family or a friend
- 29%: Money loaned by family or a friend
- 24%: Budgeting advice
- 24%: Investing advice
- 20%: Advice about managing debt
- 20%: Advice about applying for a financial product
In good news: Receiving help made 65% of respondents more willing to help others in the future. And 45% say that they understand their finances better than before COVID-19. This is especially true for Gen Z (55%) and millennials (56%).
February 2021: Our finances after a year of COVID-19
A total of 37% of Americans in our February survey said that their financial situation worsened as a result of the coronavirus pandemic, while 54% said that it was about the same.
The survey found that people experienced unemployment and worries about getting enough food during the pandemic. Our survey found that 22% had received unemployment benefits at some point in 2020 — and of those, 70% said their financial stability depended on their unemployment payments.
Around 26% of individuals said they experienced food insecurity at some point during the pandemic, of which 53% said they relied on food banks or government aid to eat.
Feelings of financial stability decreased throughout the pandemic. Based on our survey, 69% of Americans felt financially secure pre-pandemic, compared to 54% six months into the pandemic and only 49% a year into the pandemic. Approximately 24% of survey respondents took on debt during the pandemic, 48% of whom took on more than $1,000.
But the data on saving is notable. Around 29% of respondents said they were able to save during the pandemic. A full 84% of those who had saved during the pandemic said they were able to save $300 or more. And 82% of all survey takers said that the pandemic demonstrated the importance of having emergency savings.
March 2021: Banking and saving behavior
This survey’s focus on bank accounts and saving uncovered more about how many Americans are doing with saving for emergencies. Overall, 54% of respondents had an emergency account of some kind. Of those with rainy day funds, 72% had enough money saved to cover three months or more of expenses — including an astounding 18% that could cover an entire year’s worth of expenses.
The majority (79%) of folks with emergency funds said they kept their money in a bank account of some kind. Savings were the favorite type of account, with 50% electing to keep their stash in a savings account. Checking accounts made up another 29% of emergency accounts, with the remaining 18% of just-in-case funds being held in cash.
Similar to the trend uncovered in the January 2021 survey of Gen Z potentially using banks less than other generations, 24% of those age 18 to 24 who had some savings were holding it in cash rather than in a bank account.
The March survey also shed light on other financial actions people took in the previous 12 months. The most common included the following:
- 36% updated their budget
- 25% withdrew money from their emergency fund
- 15% sold off stocks or other investments
- 15% made changes to their retirement plans
- 14% filed for unemployment benefits
April 2021: Housing during a rough year
In April, 29% of respondents said that their financial situation worsened because of the COVID-19 pandemic — an improvement over February’s 37%.
But April’s survey focusing on housing illustrated how homeowners in a financial pinch have dealt with deteriorating economic conditions.
Of the 15% who sold their homes in the 12 months prior to April or who planned to sell their homes within the year, 13% said it was to avoid foreclosure and 22% said that their worsening financial situation played a role in their decision to sell.
For those who still had their homes, 24% went into forbearance at some point in the previous 12 months, of which 33% said that the COVID-19 pandemic had directly affected their finances. (The Consumer Financial Protection Bureau defines forbearance as “when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage.” People who go into forbearance will eventually have to pay back everything.)
A fifth of homeowners chose to tap into their home equity. Although it might not have been related to the pandemic, 31% of them used the money to pay for an emergency expense and 27% used the cash for necessities like groceries and utilities.
May 2021: Spending, tax refunds and more stimulus
Our May survey found that most Americans’ spending remained relatively stable during the COVID-19 pandemic, but 17% reported an increase and 34% said their spending decreased.
Only 60% of those who decreased their spending said they were ready to return to their pre-COVID-19 levels of spending. Among the remaining 40% feeling unprepared to increase their spending, 42% said it was because of a loss of income, and — once again potentially signaling a savings trend — 40% said they were trying to build an emergency fund or other savings.
Some 24% cited job loss as a major factor in keeping their spending low. Overall, a full 39% of respondents said they’d been unemployed at some point between February 2020 and May 2021 because of COVID-19.
Many were reliant on either their tax refund or stimulus check to maintain financial stability. Of the 62% of respondents who had either already received or were expecting to receive a tax refund, 47% said they planned to save the money. And 37% said they’d use the money to pay for necessities. Over half of survey takers (54%) who thought they’d get a refund agreed that receiving a tax refund was crucial for their financial stability.
(Note: 21% of respondents hadn’t filed taxes yet and weren’t sure if they would receive a refund.)
Similarly, of the 82% of Americans who had received at least one stimulus check in 2021, 41% were planning on saving the money and 40% planned to spend it on necessities. And 56% said that their stimulus check(s) were key for their financial survival.
Government aid in the form of tax refunds and stimulus checks seems to be playing an important role in not only keeping many Americans afloat — but helping some build a savings cushion.
Trends to watch
- Savings rate — Will Americans continue to put more away even as the pandemic ebbs in the U.S. and more people return to work? Or will they start to increase their spending?
- Unemployment — The April jobs report from the U.S. Bureau of Labor Statistics showed a dismal increase in employment compared with the robust gains in March. Persistent unemployment may have ripple effects on Americans’ personal finance strategies.
- Politics — Heated discussions are happening around the minimum wage and student loan forgiveness. The outcomes of these debates could both have long-lasting impacts on how Americans choose to conduct their personal finances.